The labor force of Southeast Asia is the lifeblood of the region, and by extent, the globe. In Vietnam, a population of 98 million people has rapidly industrialized the country in recent years, making it the 47th largest economy in the world, despite its small size. According to the World Atlas, the biggest industries and their GDP percentage are as follows:
Construction: 39%
Services and Tourism: 38%
Electronics: 24%
Food Processing: 15%
Mining: 8%
While Vietnam has one of the largest labor forces in the world, it does not come without its challenges. The country is developing rapidly and becoming an attractive hub for businesses, but most laborers are from rural areas and are untrained in industrial skills, creating a gap the supply and demand for skilled workers. Solving the disparity of laborers is a top priority for Vietnam.
In The World Bank’s report, “Vietnam’s Human Capital: Education Success and Future Challenges,” the organization reports on the status of their labor market, and how bridging gaps in education is one step to bolstering skilled workers in the 21st century.
From The World Bank:
“Although the Vietnamese education system is relatively equitable with regard to access at the general education level, there are gaps between disadvantaged and advantaged students—especially in secondary and higher education. Disadvantaged groups include ethnic minorities, internal migrants, those from economically poor households, those in remote and mountainous areas, and those with disabilities. Gaps are observed in access indicators such as enrollment rate, dropout rate, repetition rate, and completion rate as well as in learning outcomes. The government has introduced many policies to address these issues and made progress in narrowing the gaps, but further improvements in policy implementation are needed.
As their economies grow, countries need to invest more in higher levels of education and lifelong learning and better translate foundational knowledge and skills into those relevant to the labor market. However, even though Vietnam’s general education system is renowned worldwide for its strong performance, the tertiary system, including universities and technical and vocational institutions, suffers from structural deficiencies. Tertiary education institutions are not found to be equipping students with the skills needed by today’s labor market—or the skills needed to drive the next phase of inclusive growth. The education system needs to move toward expanding equitable access to tertiary education while making the system more relevant to the job market and the country’s human capital needs. As of 2016, the vast majority of the labor force in Vietnam was still locked in unskilled job sectors.
By 2030, it is anticipated that most countries will face labor shortages (Boston Consulting Group 2015), and investing in human capital is a key element to becoming one of the top economies in the world. In this regard, Vietnam has an advantage, with 25 percent of its population being between 15 and 29 years old and approximately 50 percent of the labor force being younger than 40 (figure 20). According to a report by PwC (2017), Vietnam has great potential for joining the list of the top 20 countries with the highest economic growth rates.”
